Application of Pacific Gas and Electric Company, a California corporation, for a Permit to Construct the Potrero to Hunters Point 115 kV Cable Project Pursuant to General Order 131-D.

Application 03-12-039

(Filed December 30, 2003)

OPINION GRANTING APPLICATION

This decision approves the application of Pacific Gas and Electric Company (PG&E) for a permit to construct a 115 kilovolt (kV) electric transmission line and associated substation modifications in the City and County of San Francisco (San Francisco). The line will run underground from the Hunters Point Power Plant (HPPP) to the Potrero Power Plant (PPP) switchyards.

The proposed project is designated to improve reliability and better serve San Francisco's electric load. In addition, the project provides one of the components needed to speed closure of the HPPP. Moreover, we find that any potentially significant environmental impacts of the project can be eliminated or mitigated to less than significant levels with implementation of the Mitigation and Monitoring Plan approved as part of this decision. Thus, we approve

PG&E's application, subject to the environmental mitigation requirements set forth in the Commission's Final Mitigated Negative Declaration (FMND).1

Project Description

PG&E seeks a permit to construct (PTC)2 additional transmission capacity in the southeast area of San Francisco. The proposed underground transmission line will run between the HPPP and PPP switchyards for approximately 2.5 miles.

With its application, PG&E filed a Proponent's Environmental Assessment (PEA), as required by Commission rule. PG&E's application and PEA proposed installation of a single-circuit, 115kV solid dielectric underground power line, as well as above-ground termination and transition structures, breakers, transformers and bus connections at both HPPP and PPP switchyards. The project will not expand either switchyard beyond its existing footprint.

According to PG&E, the proposed project will provide necessary upgrades to the electric transmission system serving San Francisco in order to improve electric reliability, better serve load and provide one component needed to meet the goal of closing HPPP pursuant to an agreement PG&E has negotiated with San Francisco.3 PG&E states in its PEA that the project is needed because electric demand in San Francisco continues to grow. It states that to meet this growing demand and ensure system reliability, substantial additions to PG&E's electric transmission systems - including this project - will be required. According to PG&E's transmission planners, a new 115kV underground cable from HPPP to PPP is the most feasible and cost-effective means of improving reliability and better serving load.

PG&E notes that the California Independent System Operator (CAISO) approved the project in December 2000. In addition, PG&E cites (and the FMND describes4) work of the San Francisco Stakeholders Study Group, a broad-based, multidisciplinary study group led by the CAISO,5 which studied electric reliability in the San Francisco area for the period 2004-09. The study concluded that substantial additions to PG&E's electric transmission system would be required to meet growth and reliability concerns. Two key components to meet demand would be the Jefferson-Martin transmission line, already approved by this Commission,6 and network reinforcement including construction of the project at issue here.

1 These required mitigation measures appear as Appendix A to this decision. Maps of the project route appear as Appendix B.2 The Commission's General Order (GO) 131-D requires utilities to seek a PTC if the project is designed to operate between 50 kV and 200 kV. Although a PTC does not require the application to include a detailed analysis of need, costs or benefits, the PEA must contain enough information so that the Commission can independently evaluate the project need and benefits in order to accurately consider them in light of the potential environmental impacts. The Commission normally limits its review of a project for which the utility seeks a PTC to environmental impacts of the project. Although we are within our authority to review other aspects of a project for which a utility seeks a permit to construct, the circumstances in this case do not suggest a more intensive review is necessary. We are convinced by PG&E's application that the project is required to improve reliability and better serve load in the San Francisco area. 3 As described in the application, in 1998, San Francisco and PG&E entered into an agreement to close HPPP as soon as it was no longer needed to sustain electric reliability in San Francisco and the surrounding areas and the CAISO authorized the HPPP's closure.4 FMND, page 1-3.5 Members include CAISO, San Francisco, PG&E, the Commission's Office of Ratepayer Advocates, the City of Palo Alto, and the Southeast Alliance for Environmental Justice. 6 Decision 04-08-046.